Wizard of Oz prototyping is a technique used in service design to simulate the behavior of a service without actually building the full working version. In this method, the appearance of automation or technology is created, but the underlying processes are manually operated by a human "wizard" behind the scenes. Wizard of Oz prototyping is particularly useful in service design when testing complex or technologically advanced services. It allows designers to simulate the service experience, observe user behavior, and make informed design decisions before investing in the full implementation of the system.

Let's say a team is designing a voice-controlled virtual assistant for a hotel booking service. Instead of building the entire voice recognition and booking system, they create a simple user interface (UI) that resembles a voice-activated virtual assistant. It may be a screen with a microphone icon and prompts for users to voice their requests. Behind the scenes, a human "wizard" takes on the role of the virtual assistant and manually processes users’ requests.

During user testing, participants interact with the UI by expressing their desired booking details. The wizard, who is observing the user's interactions, manually performs the necessary actions such as searching for available hotels and making bookings. Through this process, the team can gather insights into how users interact with the voice-controlled virtual assistant and identify any usability issues or areas for improvement. They can test different dialogue flows, responses, and user prompts to refine the user experience.

The insights gained can guide the development of the actual voice-controlled virtual assistant, ensuring that it meets user needs and expectations.